Sunday, September 14, 2008

The meltdown of Wall Street just continues on. Now UBS is announcing a another $5 billion write down for the second half of the year due to the subprime mortgage mess. From MSNBC.Com:

ZURICH (Reuters) - Swiss bank UBS will have to write down another $5 billion on its risky investments in the second half of the year, a newspaper reported on Sunday.

Without citing its sources, the Sonntags Zeitung newspaper said its research had shown that new writedowns would be necessary due to ongoing turmoil on the credit markets. A UBS spokesman declined to comment.

The paper said it expected UBS to update the market shortly before an extraordinary shareholders meeting on October 2 after the third quarter closes at the end of September.

Last month, UBS, Europe's worst casualty of the credit crisis, said writedowns climbed a further $5 billion in the second quarter to top $42 billion.

Sonntags Zeitung said it expected UBS to write down $1 billion on subprime mortgages and $1 billion on Alt-A loans that are made to borrowers with less than prime credit ratings but who are above subprime.

The paper also predicted about $2 billion in write downs on UBS's investments in monoline bond insurers and about $1 billion on student loans but said the company was unlikely to seek to raise more new capital.

In addition, Sonntags Zeitung cited analysts as saying that UBS might have to book about $2 billion in losses on its own debts in the second half.

UBS has almost $42 billion in subprime writedowns, only to add another $5 billion for this second half of the year. UBS doesn't even know the extent of their losses in their subprime mortgages. It is a continuation of more Wall Street firms reporting terrible losses from their own excessive greed in gambling on the subprime mortgage bubble. And it is coming back to haunt them.